House prices in Galway – most expensive areas hit earliest and hardest

Last week, I posted about the change in the value of family homes in various different suburbs in Dublin, from the starter homes of Lucan and Balbriggan to the top end homes in Blackrock and Dublin 6. The use of median prices, while less rigorous than the full econometric regressions, means that it’s possible to look at a wide range of submarkets and so I thought, prompted by a suggestion from a propertypin member, it would be useful to do a similar analysis for Ireland’s other cities.

Below is an equivalent chart for five areas in Galway city. These five areas are where sample sizes are largest and are ordered from left to right by the cost of the typical four-bed home in the area in 2006. Salthill is far and away the most expensive area of the city, with prices at the peak almost twice what they were in the city centre area.

In Dublin, the main findings were that the more expensive areas had been hit hardest, at least when measured by asking prices. This seems to be true of Galway also. Salthill and Knocknacarra have fallen by almost 30% from the peak by this measure, while Roscam and Rahoon have fallen by just 20%.

The exception is Galway city centre, which is priced in between those two groups, but where asking prices have fallen by just 10% so far. Perhaps a related point to make is that the flow of new properties coming on to the market from the city centre has slowed significantly. About half as many four-bed properties have come on to the market in the year to June 2009, compared to the previous 12 months.

Lastly, in Dublin there was no clear pattern about whether cheaper or more expensive areas peaked first. In Galway, though, the more expensive areas have not only fallen more, they also clearly peaked earlier.

Salthill and – to a lesser extent – Knocknacarra are generally considered more desirable areas than either Rahoon or Roscam (although Rahoon has undergone considerable gentrification in the last few years since the building of the so-called “Knocknacarra town centre” in the middle of Rahoon and the demolishing of the infamous high-rise flats).

It is therefore interesting and also puzzling that prices in Rahoon and Roscam have fallen less than prices in Salthill, which, along with Taylor’s Hill, Kingston and Old Knocknacarra (near Gentian Hill) are Galway’s most expensive and desirable areas.